Stocks rise as tough first quarter ends
NEW YORK – Wall Street closed a dismal first quarter with a moderate gain Monday, rising after a reading on regional manufacturing came in better than expected.
The Chicago Purchasing Managers Index, considered a precursor to the Institute for Supply Management manufacturing survey today, rose to 48.2 in March from 44.5 a month earlier. Economists had been expecting a reading of 47.3, according to Dow Jones Newswires. Though the reading topped forecasts, a figure below 50 nonetheless indicates a contraction in manufacturing activity.
The market’s reaction, however, was likely not as enthusiastic as it might seem from gains by the major indexes. Volume was very light, which tends to skew price movements, and the final day of the quarter had some institutions buying more for show rather than on any conviction about the economy.
It has been a difficult quarter on Wall Street, with financial companies’ continuing credit market losses and the flagging economy wiping out investors’ appetite for stocks. While the market has seen a number of up days during the quarter, overall the first-quarter trend was sharply lower.
Investors also examined a government plan to overhaul the way Wall Street is regulated. Wall Street appeared unmoved by a speech from Treasury Secretary Henry Paulson on the plan to reorganize oversight of Wall Street; details of the 218-page plan have been widely reported in recent days. It would give the Federal Reserve increased power to protect the stability of the entire financial system while merging day-to-day supervision of banks into one agency, down from five under the existing system.
Scott Wren, senior equity strategist for A.G. Edwards & Sons, said Monday’s trading showed investors were generally awaiting economic data due this week on the manufacturing and service sectors as well as employment. Investors are prepared for weak economic data, he said, but could become unnerved if there is unwelcome corporate news.
“The market is already pricing in a ton of bad economic news. Bad economic news is not going to drive the market. What’s going to drive the market is headline news,” he said.
The Dow rose 46.49, or 0.38 percent, to 12,262.89. The Standard & Poor’s 500 index advanced 7.48, or 0.57 percent, to 1,322.70, and the Nasdaq composite index rose 17.92, or 0.79 percent, to 2,279.10.
Light, sweet crude fell $4.04 to settle at $101.58 on the New York Mercantile Exchange, while gold fell $14.40 to finish at $916.20 an ounce on the Nymex.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.41 percent from 3.45 percent late Friday.